HDB concessionary housing loan, who qualifies and who can apply for it?

by Ravi Chandran January 27, 2020, 10:47 am 1.9k Views

The eligibility conditions for an HDB concessionary housing loan are several. But generally, you can apply for a HDB concessionary housing loan if you meet a few eligibility conditions.

Citizenship

At least 1 buyer is a Singapore citizen

Household Status

Have not previously taken 2 or more housing loans from HDB
Have taken 1 housing loan from HDB and the last owned property is not a private residential property (local or overseas) such as:
- HUDC flat
- Property acquired by gift
- Property inherited as a beneficiary under a will or as a result of the Intestate Succession Act
- Property owned/ acquired/ disposed of through nominees

Income Ceiling

Average gross monthly household income does not exceed:

$14,000^* for families
$21,000^* for extended families
$7,000^* for singles buying a 5-room or smaller resale flat or a 2-room new flat in a non-mature estate, under the Single Singapore Citizen (SSC) Scheme

^*For HLE applications and flat applications received before 11 September 2019, the income ceilings are $12,000 for families, $18,000 for extended families, and $6,000 for singles.

If an applicant or occupier is unemployed for less than 3 months, his/ her average income will be computed based on the actual number of months he/ she has worked.

To find out about the documents to submit, please refer to HDB’s income guidelines.

Ownership/ Interest in Property

Must not own or have disposed of any private residential property in the 30 months before the date of application for an HDB Loan Eligibility (HLE) letter. A private residential property (local or overseas) will include:
- Property acquired by gift
- Property inherited as a beneficiary under a will or as a result of the Intestate Succession Act
- Property owned/ acquired/ disposed of through nominees
Do not own more than 1 market/ hawker stall or commercial/ industrial property
If only 1 market/ hawker stall or commercial/ industrial property is owned, you must be operating the business there, and have no other sources of income

Remaining Lease

The loan amount will depend on the extent the remaining lease can cover the youngest buyer to the age of 95.
Please make use of the following online calculators to plan your budget before commiting to buy a flat:
- Resale Financial Plan
- Sales Financial Plan

Remaining lease of flat is more than 20 years and covers youngest buyer to age

HDB Housing Loan

≥ 95 years

Allowed, subject to:

Loan-to-Value (LTV) limit* of 90%; and
Loan tenure is the shortest of:
- 25 years;
- 65 years minus the average age of the buyers; or
- Remaining leaseat the point of flat application⁺ minus 20 years

< 95 years

Allowed, subject to:

LTV limit of 90% is pro-rated based on the extent that the remaining lease can cover the youngest buyer to the age of 95; and
Loan tenure is the shortest of:
- 25 years;
- 65 years minus the average age of the buyers; or
- Remaining leaseat the point of flat application⁺ minus 20 years

Notes:
^*The LTV limit refers to the maximum amount of loan a flat buyer can take up, expressed as a percentage of the purchase price or flat value.

⁺For flat applications received before 10 May 2019, the HDB housing loan may be reduced or disallowed if you are buying or taking over ownership of a flat with a remaining lease of less than 60 years.

The HDB concessionary housing loan amount you can take will depend on credit assessment, Loan-to-Value limit, remaining lease of the flat you are buying or taking over, and other HDB policies applicable at the point of the flat application.

Table of Contents

Income ceiling for HDB concessionary housing loan for extended family

The average gross monthly household income of extended families is calculated as follows:

Category	Income of Group A *(Income cannot exceed $14,000^per month)**	Income of Group B *(Income cannot exceed $14,000^per month)**	Income Ceiling of Extended Family
Parents^{^} with single children	Parents with 1 single working child	Other single children	Total income of Group A and Group B must not exceed $21,000
Parents^{^} with married child⁺	Parents with any single working children	Married child’s⁺family

^{^} Includes widow/ widower or divorcee

⁺ Includes applicants applying under the Fiancé/Fiancée Scheme

^*For HLE applications and flat applications received before 11 September 2019, the income ceilings are $12,000 for families and $18,000 for extended families.

Example of how a HDB concessionary housing loan application might work

A married couple with 3 working children wishes to get an HDB concessionary housing loan to buy an HDB flat. Their average gross monthly income is as follows:

Husband = $4,000
Wife = $4,000
Child 1 = $5,000
Child 2 = $3,000
Child 3 = $5,000

Their average gross monthly income as an extended family works out to be as follows:

Income of Group A Parents and 1 of the children Cannot exceed $14,000^*	Income of Group B Remaining children Cannot exceed $14,000^*	Income Ceiling of Extended Family Total income of Group A and Group B must not exceed $21,000^*
Husband + Wife + Child 2 = $11,000	Child 1 + Child 3 = $10,000	$21,000 The extended family is able to meet the income ceiling.

Income of Group A

Parents and 1 of the children
Cannot exceed $14,000^*

Income of Group B

Remaining children
Cannot exceed $14,000^*

Income Ceiling of Extended Family

Total income of Group A and Group B must not exceed $21,000^*

Husband + Wife + Child 2 = $11,000

Child 1 + Child 3 = $10,000

$21,000

The extended family is able to meet the income ceiling.

^*For HLE applications and flat applications received before 11 September 2019, the income ceilings are $12,000 for families and $18,000 for extended families.

Get a HDB Loan Eligibility (HLE) letter before qualifying for a HDB concessionary housing Loan

If you wish to take an HDB housing loan to buy or take over ownership of a flat, you will need to first apply for an HDB Loan Eligibility (HLE) letter before committing to the transaction. The HLE letter will be valid for 6 months. You have to wait out 30 months from the date of disbursement of an HDB housing loan before you can apply for another loan.

Do apply early as you need to have a valid HLE letter when you:

Book a new flat from HDB. Note that there is no mortgage loan financing for the purchase of a 2-room Flexi flat on short lease. You will have to pay for the flat using your cash and/ or CPF savings. Also, eligible first-timer couples who are full-time students or National Servicemen, or have completed their studies or National Service in the last 12 months before their flat application may defer the income assessment for an HDB housing loan and Additional Housing Grant/ Special CPF Housing Grant till just before key collection. And applicants without a valid HLE letter when they book a flat will not be eligible to apply for an HDB housing loan later on.
Obtain an Option to Purchase from a resale flat seller; and
Apply to take over the ownership of a flat (by way of transfer).